Concord city officials are wise not to let the economic engine sparked by the redevelopment of Main Street roll to a stop at the former state Employment Security building, the one with the 1960s-era multicolored panels that people either love or hate.
The building is scheduled to be purchased by Dol-Soul, the Massachusetts real estate development company that already owns Pembroke Place apartments on Manchester Street and Penacook Place on Fisherville Road. The company’s preliminary plans called for it to be demolished at city expense and replaced with commercial space and 109 market-rate apartments. But as happens more often than not, a problem arose.
The company revisited its plan and while it now believes the site can fit 125 apartments, construction estimates rose from $23 million to $30 million. Blame goes to the shortage of construction workers and the impact of President Donald Trump’s tariffs on building materials.
The new cost exceeds what the developer believes can be recouped, with profit, with the rents the Concord market can bear. To make the project work, the company says the city will need to cover half the $7 million increase in the projected cost. Concord’s city council should support sweetening the deal with a $3.5 million city contribution, but not until protections are put in place to guarantee that taxpayers won’t be left holding the bag if the project isn’t successful.
The $3.5 million would come from funds paid into the TIF, or tax increment financing, district that helped make the redevelopment of much of South Main Street possible. The contribution would have no effect on the tax rate. But it would postpone the date after which money from the district would go into the city’s general fund to the benefit of all taxpayers.
The median household income in Concord, according to the website datausa.io, was $61,310 last year. Living downtown has become highly desirable. The incomes of people living in the new market-rate apartments will likely be well above average. Total household income of the occupants of the site’s 125 apartments could top $10 million annually. That’s a lot of money based within walking distance of downtown restaurants, shops and entertainment venues.
Growth sparks growth and redevelopment spawns more redevelopment. Concord’s Main Street just added one new entertainment venue near the proposed apartment complex and it could someday offer another to the north at Phenix Hall. Who knows? Some cities run a free trolley up and down Main Street to serve customers and address parking problems. With more and more people visiting Concord and living downtown, that could be an amenity worth considering.
A thriving downtown raises property values throughout the city and makes Concord a more attractive destination for the young professionals, employers and entrepreneurs the city wants to attract. Sure, the city is taking a risk by partnering on the redevelopment project, but it’s one worth taking. Taxpayers will get their money back eventually and then some. After all, the state paid no taxes on the lot and building for years while the privately owned apartment complex will eventually pay an estimated $625,000 per year in taxes.
The partnership between the city and the developer is a gamble. But it’s a bet the city should make.